So, what's a city to do when they already have dug a deep hole and keep on digging?
The people in charge at Buffalo City Hall have been through this drill before and things have never ended well. What's that expression about doing the same thing over and over again expecting different results?
The budget was proposed by Mayor Byron Brown on May 1 and approved by the Common Council on May 22 with just minor tinkering . City Comptroller Barbara Miller-Williams and the Buffalo Fiscal Stability Authority (BFSA aka the Control Board) pointed out all sorts of major problem areas. The city's new budget, which went into effect on July 1, has $13.5 million in what the BFSA calls "uncertain revenues" plus another $12.2 million in revenues that have "potential timing issues;" actually the casino and cannabis revenue projections in question also have real dollar issues, since neither is likely to produce the amounts suggested. That is in addition to the future problems related to $25.8 million in one-time federal pandemic-related revenues and $14.9 million in fund balance used to balance the budget
This all means that the city will experience major funding shortfalls over the next twelve months followed by the need in the next year and every year after to fill a minimum of a $40.7 million hole. If this was a weather event Storm Team 2; 4 Warn Weather; and 7 Weather would be bringing in cots for their meteorologists to do 24/7 reporting.
Some members of the Common Council expressed concerns about some of these issues when they voted to approve the mayor's budget, but they took no significant action to address the situation. The Council is adding a lawyer to their staff, but perhaps beefing it up with people who know something about dealing with a budget crisis would be a better use of the money.
On May 15, prior to the Council vote on the budget, the Control Board met to review the new budget and four-year plan. The control board punted, declaring "the Financial Plan to be incomplete," and required the following from the city administration:
- "A gap closing plan be prepared and submitted to the BFSA to address the potential overestimated revenue of $11,530,000 contained in the proposed 2024-25 budget in the event such shortfalls are recognized."
- "The gap closing plan shall also address potential overestimated revenue in the remaining three outyears of the City of Buffalo's financial plan totaling $90,188,979 in the event such shortfalls are realized."
- The administration should "provide a plan to address potential delays in the receipt of cannabis tax and casino revenue."
The city's Commissioner of Administration, Finance, Policy and Urban Affairs, Delano Dowell Sr., replied to the BFSA on May 29, reporting that:
- "Revenue shortfalls will be addressed as they have in the past," stating that budget surpluses in personnel and fringe benefit lines in excess of $12 million will be available to cover the possible revenue gaps. Police and Fire Department overtime alone in the just completed fiscal year exceeded the budget by more than $8.6 million, requiring additional revenues to fill the gap.
- "Specific revenues in the four-year financial plan are expected to be fully realized and are not considered by the Division of the Budget to be speculative at all." This includes the proposed hotel occupancy tax and higher on-street parking changes. "Detailed studies have been conducted to arrive at these projected revenue amounts, with actions plans currently being implemented in time for fiscal years 2025 and beyond." It does not appear that those "detailed studies" have been shared with the BFSA.
- "Last resort actions [to fill 2024-2025 budget gap] include authorizing an increased [American Rescue Plan Act] revenue replacement encumbrance before the end of calendar 2024." That would mean that promised funding for community organizations, already cut once, might be cut again. That would mean that the use of additional one-time revenues would widen the gap even further in years to come.
- "Assigned fund balance can also be used for specific purposes if needed during any given fiscal year." That would mean that whatever projects or purposes the assigned fund balances were intended for would be shorted or left hanging. That would again mean that the use of additional one-time revenues would widen the gap even further in years to come.
In other words, relax, don't worry, we've got this, pay no attention.
Finally, here is what the BFSA wants in response to the city administration's response:
- "The Mayor shall submit a revised City of Buffalo 2025-2028 financial plan to address the modifications made to the proposed 2024-25 budget and certify that the budget is consistent with the revised financial plan submitted therewith and that operation within the budget is feasible…"
- "The Mayor shall submit a revised gap closing plan to address: 1) the potential overestimated revenue identified in years 2025-26, 2026-27 and 2027- 28 totaling a combined $90,188,979, and 2) the potential delays in the receipt of cannabis tax and casino revenue over the same time period."
Not exactly getting tough. In football they would call it a punt.
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